The Medicare “Donut Hole”
The Coverage Gap The way Medicare Part D was designed there was a planned coverage gap, which has become known as "the donut hole". This gap has caused a great deal of confusion and higher than expected out of pocket costs for medications. When do you reach the gap? The gap begins when a person reaches a predetermined amount during the year based on average retail cost of drugs. In 2011, that amount is set at $2840. Since Medicare drug plans negotiate for a lower price the average retail cost is not what you actually paid out of pocket. Every drug [...]